- Litecoin price continued to trade down, as there was a lot of bearish pressure this past week.
- The price broke a contracting triangle pattern on the hourly chart (data feed via Bitfinex), which may take the price below the last low of $2.99.
- Looking at the higher time frame chart (2-hours chart with data feed from HitBTC), it is clear that the price is under heavy selling pressure, and may continue moving down.
Litecoin price is currently trading near the last week low. A break below $2.95-00 may call for more losses in the near term.
How to Trade?
Litecoin price after spiking higher once this past week failed miserably, and traded down. The downside pressure was so high that the price is currently trading near the last swing low of $2.99. If sellers continue to stay in control, then they may succeed in breaking the mentioned level and creating a new low. There was a contracting triangle pattern on the hourly chart (data feed via Bitfinex), which was broken during the downside drift recently. It is a clear signal that bulls are defenseless, as the price also settled below the 100 simple moving average on the hourly chart (data feed via Bitfinex). It would be interesting to see whether the price can hold the stated level or not moving ahead.
On the flipside, if the price bounce from the current levels, then there is a chance of a double bottom pattern forming around the $2.99 level. An initial resistance on the upside can be around the broken triangle trend line, which may act as a hurdle for buyers. Above it, the 23.6% Fib retracement level of the last drop from the $3.31 high to $2.99 low might come into play. Above all, we must keep an eye on the 100 simple moving average (hourly chart with data feed via Bitfinex), which can be seen as a monster barrier. If buyers manage to even clear it, then the next level of selling interest could be around the 50% Fib retracement level of the last drop from the $3.31 high to $2.99 low.
Selling pressure is also evident on the 2-hours chart with the data feed from HitBTC. There is a monster contracting triangle, which we followed this past week. Its support trend line was tested on many occasions, and it looks like sellers want to break it. A break below the support trend line may ignite a sharp downside reaction that could even take the price below $2.90. On the upside, there are many resistance levels, starting with the 38.2% Fib retracement level of the last drop from the $3.40 high to $3.08 low.
The most important thing is that the 100 simple moving average (2-hours chart with data feed from HitBTC) is aligned with the mentioned 38.2% Fib level. Only a break above it could ignite a corrective rally towards the 61.8% Fib retracement level of the last drop from the $3.40 high to $3.08 low.
Looking at the indicators:
Hourly MACD – The MACD is in the bearish zone, which is shaping up for more losses.
Hourly RSI – The RSI is around the oversold readings, which may ignite a minor corrective rally.
Intraday Support Level (Bitfinex) – $2.99
Intraday Resistance Level (Bitfinex) – $3.06
Charts from Bitfinex and HitBTC; hosted by Trading View